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Japan to be Next Slot Machine Frontier

01/18/201701/18/2017Trey

Last month, Japanese lawmakers finally approved casino gambling after years of debate. And now, Japan is poised to be the next slot machine frontier for casino companies that have seen their profits stagnate.

The downside is that we won’t see casinos and slot machines turn their lights on until the early 2020s – when resort-style casinos can be completed. But as the Las Vegas Review-Journal reports, Japan could become the world’s third-largest casino market, making an estimated $40 billion annually.

This is impressive for a country that only expects to offer a couple of resort-style casino licenses, combined with a few regional casinos.

”When we think about the equipment suppliers as a whole, it is likely that most all of the gaming manufacturers will have an opportunity to compete and participate in the gaming equipment and systems opportunity for new casinos in Japan,” said John Decree, head of the North America research at Union Gaming Securities.

If Japan decides to increase the amount of resort casino licenses to four, slot machines could reach up to 16,000 units – the same amount that Macau has, according to Marcus Prater, executive director for Nevada-based Association of Gaming Equipment Manufacturers.

”It is a stretch to call it a blockbuster,” Prater said. “Using a limited (full-scale) resort model, Japan will not drive tens of thousands of machines annually, but we welcome any new business out there.”

As for the companies making slot machines, Sega Sammy Holdings and Konami Holding Corp. are expected to get a significant portion of their home market. Howard Klein, a veteran casino executive, adds that Japanese pachinko machines might be allowed on casino floors too.

”Japanese makers in my view will be a major looming presence in that business,” Klein explained. ”I totally expect global leaders like International Game Technology and Scientific Games to be linking up with Japanese companies — to partner or establish branches there.”

Once again, it will be at least 5 or 6 years before the Japanese casino industry gets up and running. But when mega-casino resorts do open, you can be sure that they’ll be highly popular.